Strategic Planning Professor Amir Sharif Professor of Operations

Strategic Planning Professor Amir Sharif Professor of Operations Management & Director of MBA Programmes Brunel Business School Member of AACSB International

Agenda Overview - Themes 1. What is Strategic Planning? 2. Strategic Planning Process 3. Strategic Planning Tools for Defining Strategy 4. Developing & Implementing Strategic Plans in an Academic Context / COBRA Brunel Business School 2

“STRATEGIC PLANNING IS A PROCESS BY WHICH WE CAN ENVISION THE FUTURE AND DEVELOP THE NECESSARY PROCEDURES AND OPERATIONS TO INFLUENCE AND ACHIEVE THAT FUTURE”

Agenda Outline Session THEME 1 Topics Introduction to Strategic Planning What is Strategic Planning? What to consider in Strategic Planning? 1 Benefits of Strategic Planning Pitfalls of Strategic Planning Characteristics of a Useful Strategic Plan Critical Factors for Strategic Success: An Example Types of Strategic Plans 2 Planning to Plan Outline Components of a Business Plan THEME 2 3 Strategic Planning Process – Overview Some Key Questions to Ask in Planning Strategically Brunel Business School 3

Agenda Outline Session THEME 2 Topics Strategic Planning Process Exercise 1 – Asking Strategic Questions Strategic Planning Process – Steps Strategic Planning Process – Dynamic and Continuous Process 3 Generalised Strategic Planning Process THEME 3 Strategic Planning Tools for Defining Strategy Determining Who’s Involved When? 4 Strategic Planning – Summarising Strategic Planning Tools Exercise 2 – Carrying out a SWOT Analysis 4 Most Valuable Strategic Tools Reasons for Using Strategic Tools Exercise 3 - Generating a Risk Matrix CONCLUDING REMARKS FOR DAY 1 Brunel Business School 4

Agenda Outline Session Topics Review of PVQTM Results THEME 4 5 Developing & Implementing Strategic Plan within an Academic Context Strategic Formulation and Implementation Strategic Planning Outcomes within University Settings Exercise 4 - Carrying out Scenario Planning 5 The COBRA Framework for Strategic Planning Success CONCLUDING REMARKS FOR DAY 2 Brunel Business School 5

Overview & Aims - Strategic Planning The purpose of this two day programme is to introduce you to the concepts and try out some tools and techniques of “Strategic Planning” Identify your organisation’s strengths and weaknesses Take steps organisation to prioritise risks confronting your Direct your organisation’s resources towards particular goals Increase awareness of internal and external factors impinging upon your organisation (at present and in the future) Identify strategic scenarios for action (and required resources and responsibilities) Brunel Business School 6

THEME 1 Introduction to Strategic Planning Brunel Business School 9

What is Strategic Planning? A strategy signifies a plan of action designed to accomplish organisational aspirations and intentionally opting to be clear about your organisation’s direction with regards to what’s happening in the dynamic environment Ultimately, strategy’s roots are from the battlefield – and the art of war: Creating a situation from which an outcome or desired advantage can be realised with given resources and time This is different as compared to tactics (which allow you to achieve specific goals en route to the strategic outcome) That is a definition but there are many more definitions of strategy. . . Brunel Business School 11

Benefits of Strategic Planning A prerequisite for better information for decisions making may be recognised Growth and development can be accelerated and enhanced Deficient performing areas can be identified and eradicated Gain control of operational problems Develop better communication with those both inside and outside the organisation Provides a road map to illustrate where the organisation is going and how to get there Develop better internal coordination of activities Develop a frame of reference for budgets and short and long range operational plans Gain a sense of security among employees that comes from better understanding of the changing environment and the organisation’s ability to adapt Brunel Business School Source: http: //www. entarga. com/stratplan/plngbenefits. htm 16

Pitfalls to Avoid in Strategic Planning Jumping from mission formulation to strategy development without sufficient time to determine the critical success indicators embodied in the mission statement Top management fails to communicate the plan to the other employees, who continue working in the dark Management rejecting the formal planning mechanism and making intuitive decisions that may conflict with the formal plan – this creates confusion for other employees on how the plan is to be employed in their work activities Failing to use the plans as a standard for measuring performance Top management believing that it can create a plan by delegating the planning function to a planner – while the planner may facilitate the planning process, management must still take ownership of the plan itself Brunel Business School http: //www. entarga. com/stratplan/pitfalls. htm 17

Pitfalls to Avoid in Strategic Planning Failure to involve key employees in all phases of the planning process (preparation, strategy development, evaluation, and implementation) Failure to create a climate which is collaborative and not resistant to change Treating planning as something quite different and not an integral part of the entire management process Failing to use the plans as a standard for measuring performance Becoming so engrossed in current problems that insufficient time is spent on long-range planning Becoming so formal that the process lacks the flexibility and creativity needed to address the uniqueness of each company Brunel Business School http: //www. entarga. com/stratplan/pitfalls. htm 18

Characteristics of a Strategic Plan A useful strategic plan exhibits many characteristics. Specifically, it should be: A Set of Priorities Achievable, Measurable and Time Sensitivity A Unit, not a Menu Flexible and Responsive to Changing Conditions A Means to an End, not an End itself Short and Simple Based on Three- to Five year Period Source: Professional Practices in Association Management, John B. Cox, CAE, Editor, American Society of Association Executives, 1997. Brunel Business School 19

Types of Strategic Plans Following are some types of strategic plans: Basic Strategic Planning Issue-based or Goal-based Strategic Planning Scenario Planning Alignment Model Strategic Planning Organic (or Self. Organising) Planning Brunel Business School 28

Components of a Strategic Plan Vision (Mission and Values) Shareholder Expectations Objectives Business Environment & Turbulence Gap Analysis Core Competencies Strategic Options and Risks Resource Availability (Gap between Objectives & Expectations) Markets and Competitors Capabilities, Strengths & Weaknesses Selected Strategy EXPECTED FINANCIAL OUTCOME GOALS (Milestones) ACTION PLANS Actual Results Monitoring and Controlling Process Brunel Business School Source: Hussey, D. E. (1999). Strategy and Planning: A Manager’s Guide, John Wiley & Sons Ltd. England. 36

THEME 2 – Strategic Planning Process Brunel Business School 37

Strategic Planning Process – Overview If organisational readiness, commitment and capacity is available the strategic planning process is then available to: Drive sustained success for companies at all levels of maturity. Provide an alignment that helps the company evolve into a strategically focused organisation. Link a common corporate vision with executable objectives and measures that improve operating results and growth. Be a roadmap for companies trying to proactively address opportunities or challenges in an evolving marketplace, a blueprint for firms looking to acquire or be acquired, or a catalyst of growth for organisations trying to reach the next level. Brunel Business School 38

Strategic Planning Process – Overview But still WHY opt for a strategic planning process? Brunel Business School 39

Strategic Planning Process – Overview Significant facets to go through a process for developing a strategic plan: The process is strategic because it involves preparing the best way to respond to the circumstances of the organisation’s environment, whether or not its circumstances are known in advance; organisations often must respond to dynamic and even hostile environments. Being strategic, then, means being clear about the organisation's objectives, being aware of the organisation's resources, and incorporating both into being consciously responsive to a dynamic environment. The process is about planning because it involves intentionally setting goals (i. e. , choosing a desired future) and developing an approach to achieving those goals. The process is disciplined in that it calls for a certain order and pattern to keep it focused and productive. Brunel Business School 40

Strategic Planning Process – Overview The process raises a sequence of questions that helps planners examine experience, test assumptions, gather and incorporate information about the present, and anticipate the environment in which the organisation will be working in the future. Because it is impossible to do everything that needs to be done in this world, strategic planning implies that some organisational decisions and actions are more important than others – and that much of the strategy lies in prioritising what is most important to achieving organisational success. Finally, the process is about fundamental decisions and actions because choices must be made in order to answer the sequence of questions mentioned above. The plan is ultimately no more, and no less, than a set of decisions about what to do, why to do it, and how to do it. Brunel Business School 41

Some Key Questions Planning Strategically to Ask in Both leaders as well as the overall organisation must identify and share the evaluation, planning, execution and management of the overall strategic vision. Strategic planning helps to get there. . . Some keys questions that should be asked at various areas and levels of activity are: Where are we now/what are we doing now? Where are we going? How are we going to get there? What are we achieving by doing this? Why are we doing this? Does what we do fit the customer’s requirements? How do we know this? How does what we do compare with competitors, insofar as we are able to deduce this? Are there other ways we could achieve the same benefits? Should we be using these? How does this contribute to our corporate success? How does it help the corporate vision? Brunel Business School Source: Hussey, D. E. (1999). Strategy and Planning: A Manager’s Guide, John Wiley & Sons Ltd. England. 42

THEME 2 – Exercise 1 Brunel Business School 68

Exercise 1 – Asking Strategic Questions: try to answer as many as possible 1. What has happened in the past three years in the external environment that could organisation/project? affect your work as an 2. What are the challenges and threats facing you as an organisation/project in your external environment? 3. What are the opportunities you should be taking advantage of in the environment in order to: (a) Make you more sustainable as a project/organisation? (b) Help you achieve your vision? 4. What information do you have that you think is important to share with others in the strategic planning process? 5. What are the organisation/project? important strengths of your Brunel Business School 69

Exercise 1 – Asking Strategic Questions: try to answer as many as possible 6. What weaknesses are preventing your organisation/project from achieving its vision? 7. Do you think you are clear about your vision, values and mission? Make some notes about what you think your vision, values and mission are. 8. What challenges have you failed to meet in the past two to three years and why have you failed to meet them? 9. What challenges have you met well in the past two to three years and what helped you to meet them? 10. What is the most important outcome that you would like to see emerging from this strategic planning process? Why do you think it is so important? Brunel Business School 70

Strategic Planning Process – Step 1 Steps in the strategic planning process may vary from organisation to organisation. Many organisations have adopted a formalised top-down strategic planning model in which executive management periodically formulates the organisation’s strategy, communicating this down the organisation for implementation. It is now recognised that this approach should not just be reserved for and include senior management however The following is a flowchart model of the whole strategic planning process: Getting Ready Develop Mission / Vision Current Situation Analysis Brunel Business School Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Source: Hussey, D. E. (1999). Strategy and Planning: A Manager’s Guide, John Wiley & Sons Ltd. England. Evaluation and Control 44

Strategic Planning Process – Step 1 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control This step is based on the following: Exploring specific issues and choices the process needs to address; clarify the roles, Creating a planning committee, Developing an organisational profile, and Identifying relevant information that must be collected to help make sound decisions Brunel Business School 45

Strategic Planning Process – Step 1 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: Who do you think needs to be involved at this stage, e. g. in the planning committee? Give examples of issues and choices that need to be addressed at this stage. What details are required for developing the organisational profile at this stage? What type information is required that will assist in the decision making process? Brunel Business School 46

Strategic Planning Process – Step 2 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control An organisation’s mission statement illustrates its reason for being – about describing the organisation’s business vision, including the unchanging values and purpose of the organisation and forwardlooking visionary goals that guide the pursuit of future opportunities. The mission statement conveys a sense of purpose to employees and projects organisation image to customers. In the strategy formulation process, the mission statement sets the mood of where the company should go. Brunel Business School 47

Strategic Planning Process – Step 2 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: Who do you think needs to be involved at this stage, e. g. in developing organisation’s mission/vision? What information is required at this stage for developing the mission/vision? What is the mission? What is the vision? Where do you want to be in the future? Brunel Business School 48

Strategic Planning Process – Step 3 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control After specifying the mission and vision and indicating specific objectives, organisations need to analyse their current situation focusing on both external (e. g. PEST analysis) and internal (e. g. SWOT analysis) environments. Changes in the external environment often present new opportunities and new ways to achieve the vision and reach the objectives. An environmental scan is performed to identify the available opportunities. More importantly, the organisation must know its own capabilities and limitations to select the opportunities that it can pursue with a higher probability of success. This step, thus, involves the analysis of both external and internal environment. Brunel Business School 49

Strategic Planning Process – Step 3 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: What does the organisation needs to analyse at this stage? Who conducts this analysis? What changes we need to take into consideration at this stage? What are the types of external and internal environment factors? Brunel Business School 50

Strategic Planning Process – Step 4 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Now that the mission/vision is affirmed, critical issues identified during the current situation analysis, commence on exploring the broad approaches (strategies) for addressing critical issues and the results to be sought i. e. long and short-term objectives and goals. Identifying and agreeing on internal priorities that include everything related to productivity improvement e. g. employees, training, operations, technology, efficiencies, R&D, and anything else that deals with the internal operations of your organisation. Thereafter, agreeing on external priorities that include everything that is related to revenue generation such as entering new target markets, developing new products, and partnering with other organisations. This is where the strategic planning process develops ideas and action steps, which are most effectively generated when delegated throughout management. Brunel Business School 51

Strategic Planning Process – Step 4 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: Who is involved in this stage and what type of approaches and or strategies are explored? What are the other different types of internal priorities besides studied in the previous slide? Any examples? What are the other different types of external priorities besides studied in the previous slide? Any examples? Brunel Business School 52

Strategic Planning Process – Step 5 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Put the pieces together into one coherent document that is practical, can be implemented, and easily managed and monitored – putting the plan together and getting it ready for implementation. Following steps are embarked on in this step: Developing a detailed action plan for organisational short-term goals Evaluating the financial feasibility of the strategic plan Attainment of financial support for the strategic plan Mapping out the overall strategy Writing, reviewing, and finalising the strategic plan Determining a solid process to execute your strategic plan Determining how the management will roll out and communicate the overall strategic plan across the organisation Employing accountability measures to help achieve the overall goals Scrutinising the strategic plan and evaluating the changes as required Brunel Business School 53

Strategic Planning Process – Step 5 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Risk Management Risk management has been described as a managerial process involving the executive functions of planning, organising, leading, and controlling activities in a firm relative to specified risks with a view to reducing their cost to the firm in order to maximise the firm's value. Risk analysis and risk management can help organisations make plans to better manoeuvre around obstacles. Assessing risks in advance may facilitate the management to determine the most cost-effective strategies to handle each type of risk. The process further involves systematic identification and evaluation of risks, selection and implementation of strategies for managing them, and continuous monitoring and improvement of the risk management program. Brunel Business School 54

Strategic Planning Process – Step 5 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Risk Management Integrating risk management and strategic planning leverages the benefits of both processes and makes them mutually reinforcing. However, when risk management process is undertaken effectively along with strategic planning, it can deliver a range of benefits, by: improving planning processes by enabling the key focus to remain on core business and helping to ensure continuity of service delivery; reducing the likelihood of potentially costly ‘surprises’ and preparing for challenging and undesirable events and outcomes; contributing to the development of a positive organisational culture, in which people and organisations understand their purpose, roles and direction; and improving accountability and governance — in relation to both decision-making and outcomes. Brunel Business School 55

Strategic Planning Process – Step 5 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: What types of risks are involved? Any examples? What type of information is required? Can you rank each risk (likelihood, impact)? Who will do this? Brunel Business School 56

Strategic Planning Process – Step 6 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Once a clear picture of the organisation and its environment is organised, specific strategic alternatives can be developed. Whilst different organisations have distinct alternatives depending on their situation, to attain competitive advantage there also exist generic strategies that can be applied across a wide range of organisations. Porter identified cost leadership, differentiation, and focus as three generic strategies that may be considered when defining strategic alternatives. Porter advised against implementing a combination of these strategies for a given product; rather, he argued that only one of the generic strategy alternatives should be pursued. Brunel Business School 57

Strategic Planning Process – Step 6 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: Who is involved at this stage? Are the planners involved in formulating the strategy at this stage? Besides generic strategies, what other strategies considered while defining strategic alternatives? can What is the timeline for “success” for generating a strategy? Brunel Business School 58 be

Strategic Planning Process – Step 7 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control There is a high possibility that the strategy will be narrated using complex abstract terminology. For effective implementation of strategy, it needs to be interpreted into much detailed policies using language that is unambiguous at the functional level of the organisation. In addition, implementation of strategy involves organisation of the firm’s resources and motivation of the staff to achieve objectives. The way in which the strategy is implemented can have a significant impact on whether it will be successful. In large organisations, those who implement strategy likely will be different to those who formulated the strategy. For this reason, care must be taken to properly communicate the strategy and the reasoning behind the development of such strategy. Brunel Business School 59

Strategic Planning Process – Step 7 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: Who is involved at this stage? What type of policies are developed at this stage? What type of resources are required and when? When will “success” come – and what will it “look” like? Brunel Business School 60

Strategic Planning Process – Step 8 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Once strategy is implemented, the results of strategy need to be measured and evaluated, with changes made as required to keep the plan on track. Control systems should be developed and implemented to facilitate this monitoring. Standards of performance need to be set, and the actual performance measured, and suitable actions taken to ensure success of the whole strategic planning process. Brunel Business School 61

Strategic Planning Process – Step 8 Getting Ready Develop Mission / Vision Current Situation Analysis Agree on Priorities Organise the Plan Strategy Formulation Strategy Implementation Evaluation and Control Questions for the audience: Who is involved at this stage? What type of evaluation frameworks are available that can be utilised at this stage? What type of resources are required while performing the evaluation process? What are the steps needed to overcome challenges and address failure? Brunel Business School 62

Strategic Planning Process – Dynamic & Continuous Process The strategic planning process is dynamic and continuous. A change in one step may require a change in the entire strategy. Getting Ready Develop Mission / Vision Evaluation and Control Current Situation Analysis Strategy Implementation Strategy Formulation Agree on Priorities Organise the Plan Brunel Business School As such, the process must be repeated frequently in order to adapt the strategy to environmental changes. Throughout the process the organisation may need to cycle back to a previous step and make adjustments. 63

Stakeholder Management In order to understand stakeholders, we need to understand their objectives and motivations Business objectives are derived from the business strategy Quantified statements of what business unit leaders expect to achieve from pursuing a chosen set of processes and activities Targets against which business unit leaders performance will be evaluated Formal and tacit objectives Example: to increase market share from 12% to 30% in four years Motivations are inherent in the organisation and individual Group, division, team and individual goals and priorities Can be externally or internally focussed Brunel Business School 66

Stakeholder Management Entities outside and within the unit of analysis who can affect, have some power, or have a degree of influence over whether or not a business objective is achieved External (e. g. customers, regulators) or internal (staff, senior managers, board members) Prioritisation: who will have the biggest impact on objectives? Brunel Business School 66

Stakeholder Mapping Method for identifying who is involved in your change programme 1. 2. 3. 4. 5. Identify Stakeholders Analyze Needs and Wants Identify Barriers to Change Best Means for Communication Ideas for Participation and leveraging their Skills and Knowledge Brunel Business School

Comparison of Stakeholders • HEIs President • Executive Management • Public Sector Executive Management • Rector • Employees • Vice Rector • Customers • Citizens • Deans • Shareholders • Voters • Heads of Department • Distributors • Agencies Private Sector • • Faculty • Students Retailers Brunel Business School

Managing Expectations Wants Take for granted Of value Desires Expectations Obligations Wishes Requirements Brunel Business School Needs

Analysis of Expectations Stakeholder Expectations Category Verified Value to stakeholder Current Future List each stakeholder by segment Identify each expectation Meet Amend Create Eliminate Brunel Business School Ask the stakeholder? • Important • Desired • Critical Level of fulfilment Current Future • Ignore • Deflect • Partially or Completely satisfy • Delight

Measuring Expectations Stakeholder Expectations segment Measures must have a number Brunel Business School Change to suit your organisation Measures Time Cost Quality Frequency Accuracy If you struggle to find a measure, question the expectation Other

Strategic Planning – Summarising Strategic planning is as much about planning and execution as it is about decision making – good decision making comes from getting the right data on which to base your decisions. Indeed, opportunities for your organisation are substantial - you have more to do than you have time to do it – and in order to move your organisation into the future, you need to select the right opportunities and the right strategy to go with them. Brunel Business School 67

THEME 3 – Strategic Planning Tools for Defining Strategy Brunel Business School 71

Strategic Planning Tools Strategists have devised a number of strategic planning tools that can be used in strategic planning. These types of strategic practices facilitate managers to deal with the challenges confronted in managing their organisation’s strategic direction. Following are the top 10 strategy tools highly addressed by practitioners and academic researchers: Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Source: Jarzabkowski, P. , Giulietti, M. and Oliveira, B. (2009) Building a Strategy Toolkit: Lessons from Business, AIM Research. Brunel Business School 72

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Those capabilities fundamental to a firm’s strategy and performance that are deployed across strategic business units. Core competencies are a set of unique internal skills processes and systems that provide competitive advantage in the market. The benefit of the analysis to the company includes the following. A disciplined approach to identifying those activities that the business must undertake to compete in the market. A process for evaluation and prioritisation of the collective know how of the business. A process for identifying values and prioritising the activities of the business in a way that lends itself to making strategic decisions on the use of company resources or the need for new or additional resources. Brunel Business School 73

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Ansoff Matrix (Ansoff, 1965) Brunel Business School 73

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Those variables that management can influence through its decisions and that can significantly affect the overall competitive position of the firm in an industry. Types of CFSs that can be taken into consideration: The structure of a particular industry (industry) competitive strategy, industry position, and geographical location (strategy) the macro environment (environmental) problems or challenges to the organization (temporal) management perspective (management) Brunel Business School 74

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain 5 M model (Irani, Sharif and Love, 2001) Brunel Business School 74

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Analysis of the four stages in a product’s life cycle: Introduction (includes the product launch with its requirements to getting it launch in such a way so that it will have maximum impact at the moment of sale. A good example is the launch of “i. Phone 4, i. PAD 1 & 2” by Apple). Growth (this phase offers the satisfaction of seeing the product take-off in the marketplace. This is the appropriate timing to focus on increasing the market share. If the product has been introduced first into the market, then it is in a position to gain market share relatively easily). Maturity (When the market becomes saturated with variations of the basic product, and all competitors are represented in terms of an alternative product, the maturity phase arrives. Moreover, the market share growth is at the expense of someone else’s business, rather than the growth of the market itself). Decline (The decision for withdrawing a product seems to be a complex task and there a lot of issues to be resolved before with decide to move it out of the market. Dilemmas such as maintenance, service competitions reaction in filling the market gap are some issues that increase the complexity of the decision process to withdraw a product from the market). Brunel Business School 75

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Product Lifecycle (Levitt, 1965) Brunel Business School 75

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Analysis of wider ‘meso-economic’ and ‘macro-economic’ environments, including: Political, Economic, Social, Technological, Legal and Environmental factors. Political (e. g. how and to extent the government intervenes in global, national economy) Economic (e. g. economic growth factors impact on how businesses operate and make decisions) Social (e. g. cultural and behavioural aspects and other developments in society) Technological (developments such as R&D activities, automation, rate of technological change) Legal (e. g. how legislation affects an organisation’s operations, its costs, and demand for its products) Environmental (e. g. ecological and related aspects such as weather, climate. ) Brunel Business School 76

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain PESTLE Political (e. g. how and to extent the government intervenes in global, national economy) Economic (e. g. economic growth factors impact on how businesses operate and make decisions) Social (e. g. cultural and behavioural aspects and other developments in society) Technological (developments such as R&D activities, automation, rate of technological change) Legal (e. g. how legislation affects an organisation’s operations, its costs, and demand for its products) Environmental (e. g. ecological and related aspects such as weather, climate. ) Brunel Business School 76

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain A framework for analysing an industry and determine its competitive intensity and market attractiveness. The strategic business manager seeking to develop an edge over rival organisations can use this framework to better understand the industry context in which the firm operates. It includes three sources of horizontal competition (substitutes, substitutes entrants and rivals) rivals and two sources of vertical competition (power of suppliers and power of buyers). buyers Brunel Business School 77

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Porter (1985) Bargaining Power of Suppliers Threats of New Entrants Rivalry amongst Existing Firms in the Industry Bargaining Power of Buyers Threats of Substitute Products/Services Brunel Business School 77

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Analyses the growth and profitability of potential of products. This tool is based on the product life cycle theory that can used to determine what priorities should be given in the product portfolio of a business unit. E. g. placing products in the BCG matrix results in 4 categories in a portfolio of a company: Stars, Stars Cash Cows, Cows Dogs, Dogs Question Marks Brunel Business School 78

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Analysing the potential of firm’s resources to generate sustained competitive advantage along four dimensions – value, rareness, inimitability, and non-substitutability (VRIN) – Barney (1986): Valuable (when they enable a firm to conceive or implement strategies that improve its efficiency or effectiveness) Rare (valuable firm resources possessed by large number of competing firms cannot be sources of either a competitive advantage or a sustainable competitive advantage Imperfectly Imitable (because of a combination of three reasons; unique historical conditions, causally ambiguous, social complex) Non-Substitutable (there must not be strategically valuable resources that are themselves either not rare or imitable) Brunel Business School 79

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Also known as Scenario Planning : “stories of the future” Approach to develop flexible long-term plans. It is an attempt to consider a diverse range of possibilities which can highlight possible events that decision makers would otherwise ignore. It involves looking into the future, anticipating possible events, scenarios or changes, and analysing what will happen to the company as a result of those things happening, AND, planning to minimise any damage, and maximise opportunities. Brunel Business School 80

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain This tool is usually used as part of undertaking an environmental scan, that help identify external factors that need to be planned for, and internal factors (i. e. strengths, weaknesses, opportunities and threats) that need to be planned for in determining where a business should be going in the future. The SWOT analysis can be done as part of strategic planning, but it can also be done independently of the larger process as a standalone. More on this later. . . Brunel Business School 81

Strategic Planning Tools Core Competency Analysis Critical (Key) Success Factors Industry Life Cycle PESTLE Porter’s 5 Forces Portfolio Matrices, BCG or Mc. Kinsey Resource. Based View Scenario Building SWOT Value Chain Analysis that categorises and evaluates the integration of the primary and supporting value-adding activities within and around an organisation. A tool that facilitates better strategic planning in a business setting. Value chain analysis is a powerful tool for managers to identify the key activities within the firm which form the value chain for that organisation, and have the potential of a sustainable competitive advantage for a company. Brunel Business School 82

THEME 3 – Exercise 2 Brunel Business School 95

Exercise 2 – Carry out a SWOT Analysis Arrange into groups Fill in a grid with your Top 5 SWOT for your organisation Let everyone speak Capture all the main points Prioritise the top / main five HINT: go in sequence, O-T-S-W! Strengths (S) Opportunities (O) Weaknesses (W) Threats (T) Brunel Business School 86

THEME 4 – Developing & Implementing Strategic Plans within an Academic Context Brunel Business School 87

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THEME 4 – Exercise 4 Brunel Business School 95

Exercise 4 – Scenario Planning Now we need to bring it all together! 1. From your SWOT matrix, identify those entries which are Political, Economic, Social, Technological, Legal, Environmental – hence carry out PESTLE on SWOT 2. Create columns for P, E, S, T, L and E (this is a PESTLE matrix); search for and remove any duplicate entries 3. Select any one of the cells in the P column and then choose any E, S, T, L and E cells to create a scenario: read this from left to right 4. Optional steps: • For one given scenario perform a risk analysis (likelihood / impact and place on your risk matrix) • Identify the relevant stakeholders for each scenario / risk combination Brunel Business School 96

The COBRA Framework for Strategic Planning Success You can’t keep a track on everything – but you can remember some key aspects of the approach. . . Within the strategic planning process, keeping sight of all of the strategic, tactical and operational aspects of an organisation is paramount COBRA ensures that the essence of strategic planning can be remembered: Recognising Challenges facing your organisation Involves stating Outcomes which are desired In order for Benefits to be realised Noting specific Requirements to meet plans Which are reliant upon Actions to take place Brunel Business School 90

The COBRA Framework for Strategic Planning Success Challenges Purpose: To be able to reason and prioritise those critical factors supporting or hindering competitive advantage (internally or externally) Method: Asking / Answering strategic questions SWOT PEST / PESTLE Brunel Business School 90

The COBRA Framework for Strategic Planning Success Outcomes Purpose: To assess the impact of internal and external factors on the strategic goals and future intent of the organisation Method: BCG Matrix Risk Matrix Value Chain Brunel Business School 91

The COBRA Framework for Strategic Planning Success Benefits Purpose: To identify benefits within the organisation as a result of process flows (products, services, information or other resources) Method: Value Chain analysis RBV / VRIN Stakeholder Mapping Brunel Business School 92

The COBRA Framework for Strategic Planning Success Requirements Purpose: To outline the managerial and resource commitment from the firm to achieve strategic goals Method: Ansoff Matrix Resource Based View (RBV) Scenarion Planning Brunel Business School 93

The COBRA Framework for Strategic Planning Success Actions Purpose: To identify and plan for the implementation of the strategic planning process – putting theory into practice Method: 5 M model (CSFs) Risk Matrix Scenario Planning Brunel Business School 94

End of Day 2 Brunel Business School 97

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References Irani, Z. , Sharif, A. M. , and Love, P. E. D. (2001). ‘Transforming Failure into Success through Organizational Learning: An analysis of a Manufacturing Information System’, European Journal of Information Systems, 10 (1) : 55 - 66. Jarzabkowski, P. , Giulietti, M. and Oliveira, B. (2009) ‘Building a Strategy Toolkit: Lessons from Business’, AIM Research. Johnson G. , Scholes K. and Whittington, R. (2008). Exploring Corporate Strategy: text and cases (8 th ed), Harlow: Pearson Education, UK. Mintzberg, H (1996). ‘The Fall and Rise of Strategic Planning’, Harvard Business Review. Porter, M. E. (1985). Competitive Advantage. Free Press, NY, USA. Porter, M. E. (1996). ‘What is strategy? ’, Harvard Business Review, 74 (6): 61– 81. Sharrock, G. (1999). ‘Performance Management and Cultural Difference in the Australian University’, Asia Pacific Journal of Human Resources, 36 (3) : 87 – 101. Brunel Business School 98